To what extent can health insurance companies nudge their ... · to improve people's life skills, while also helping solve problems in a society. Nudging can occur even when people

ANA VICTÒRIA BERLIM, CÉLINE FÄH

To what extent can health insurance companies nudge their customers to a healthier

lifestyle?

PAPER N. 15

I paper sono stati selezionati a conclusione del corso BioLaw: Teaching European Law and Life Sciences

(BioTell) a.a. 2018-2019, organizzato all'interno del Modulo Jean Monnet “BioLaw: Teaching European Law

and Life Sciences (BioTell)”, coordinato presso l'Università di Trento dai docenti Carlo Casonato e Simone

Penasa.

Trento BioLaw Selected Student Papers

1

To what extent can health insurance companies nudge their customers

to a healthier lifestyle?

Ana Victória Berlim, Céline Fäh∗

ABSTRACT: Nudging has become a popular concept, used both by governments and private entities to optimise a person’s

behaviour. This paper seeks to provide a general overview of the theories evolving around nudging, as well as the

advantages and disadvantages. Those theoretical debates are then substantiated by a current example of the Swiss

health insurance sector. Digitized health promotion has become increasingly popular. In the case analysed, a Swiss

insurance company pays financial benefits for customers enrolled in their supplementary, as well as basic health

insurance, if they participate in a program that is rewarding points for physical activity and preventive health measures.

Concerns regarding privacy, the principle of non-discrimination and paternalism have started a widespread public

debate and demonstrate to what degree the previous theoretical discussions occur in practice.

KEY-WORDS: Nudging; Health insurance; Right to privacy; Digitized Health Promotion; Switzerland.

SUMMARY: 1. Introduction – 2. The concept of nudging – 3. Nudging in practice - or how can health insurances nudge

their customers to a healthier lifestyle? – 3.1 A general introduction to health care in Switzerland – 3.2 The case of

Helsana – 3.2.1 Getting money for your bikini body - can you have your cake and eat it too? – 3.2.2 How does one

collect steps in a wheelchair? – 3.2.3 Is paying hard cash still a soft nudge? – 4. Conclusion

1. Introduction

This paper addresses the issue of nudging and the idea of privacy in their combined application in the health

insurance sector.

It is known that nudging is intertwined with choice architecture, where the latter, according to Luciano

Lobato, means «the context designed with scientific basis for behavioural change, either through a logical

and rational argument or through contextual environmental factors that would be irrelevant to traditional

economic perspective, whether through the interface of a product or software»1.

Therefore, by using the concept of choice architecture, one can explain nudging as one of the ways to

influence people to make improved life choices, to the point of there being change in some behaviours that

were customary to the user, but did not always have the best consequence or result.

When addressing the idea of nudging and the architecture of choice, it is worth mentioning that several

∗ The authors are exchange students at Università degli Studi di Trento and followed both the course ‘BioLaw: Teaching European

Law and Life Sciences’. Ana Victória Berlim is originally from Brazil and studies at Universidade do Vale do Itajaí. Céline Fäh is a Swiss

citizen doing an LLM in International Laws at Maastricht University (the Netherlands). 1 L. LOBATO, A ética da arquitetura da escolha, in NudgesLab, 2016, http://www.nudgeslab.com/index.php/a-etica-da-arquitetura-

da-escolha/ (last visited 11/05/2018).

To what extent can health insurance companies nudge their customers to a healthier lifestyle?


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authors have raised the issue of liberal paternalism, which is considered the first step towards the

development of nudging because, as Thaler and Sunstein have explained, paternalist libertarians demand

that people have the free power of choice. Furthermore, in their theory, they have sought to create policies

that maintain or even increase people’s freedom of choice2.

Meanwhile, public law contains the right to reserve personal information and the right to a private life,

including individual choices, activities and behaviours.

At the international level, the right to privacy has been recognised in Article 8 of the Convention for the

Protection of Human Rights and Fundamental Freedoms (ECHR) since 1950. This document states:

«Article 8 - Right to respect for private and family life

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in

accordance with the law and is necessary in a democratic society in the interests of national security, public

safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection

of health or morals, or for the protection of the rights and freedoms of others3».

For a better understanding of the perception of a private life, Niemietz v. Germany is a valid example. In that

case, the ruling held that «The Court does not consider it possible or necessary to attempt an exhaustive

definition of the notion of “private life”. However, it would be too restrictive to limit the notion to an “inner

circle” in which the individual may live his own personal life as he chooses and to exclude therefrom entirely

the outside world not encompassed within that circle. Respect for private life must also comprise to a certain

degree the right to establish and develop relationships with other human beings»4.

In this way, it is possible to identify the problem addressed in the present study, which examines how Swiss

health insurance Helsana practices nudging. In short, the programme introduced by Helsana seeks to

financially compensate customers for an active lifestyle, thus incentivising healthy routines, which reduces

business costs of the health insurance. However, as will be analysed, the operation is not always conducted

with respect for the private lives of users. In addition, the prevalent principle of non-discrimination and

freedom from paternalistic concerns will be assessed and developed in the following chapters.

2 R. THALER, C. SUNSTEIN, Nudge: Improving Decisions About Health, Wealth, and Happiness, 2008. 3 European Convention for the Protection of Human Rights and Fundamental Freedoms [1950] 213 UNTS 221. 4 Case of Niemietz v. Germany, Application no. 13710/88, (European Court of Human Rights, 16/12/1992).

Ana Victória Berlim, Céline Fäh

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2. The concept of nudging

As presented in the introduction, the main point of this work is to explain the idea of nudging and how it

relates to health care and the right to privacy. However, this paper shall not be limited to theoretical aspects,

and a case study of a Swiss health insurance will be analysed at the end. Before turning to the case study, it

is first necessary to conceptualise and understand the concept and implications of nudging.

According to Thaler and Sunstein, a nudge is defined as «any aspect of the choice architecture that alters

people's behaviour in a predictable way without forbidding any options or significantly changing their

economic incentives»5.

In essence, nudging is a way of influencing people's actions - positively and ethically - through scientific

knowledge. The idea behind nudging is that persuasion, rather than coercion or deception, can be used to

positively influence changes in habits and behaviours according to an individual’s will, resulting in the

achievement of objectives or activities or leading to the motivation of the user. The choice architect has a

responsibility to organise the context in which people make their decisions.

The idea of nudging is accompanied by three characteristics. The first, being represented by the purpose of

reaching the main objective, is to change people's actions in an ethical and positive way. The second

characteristic is the scope of design planning that is connected to nudging actions, and the third is the

incorporation of scientific knowledge into collaboration efforts to influence the actions of users.

According to William Safire, a nudge is «to push mildly or poke gently in the ribs, especially with the elbow»,

and when that comes, it is an alert or a reminder to gently warn a person6.

Returning to the definition of Thaler and Sunstein, nudging is a factor that plays a significant role in shifting

behaviour and human actions because we react to incentives and are influenced by incentives. Therefore,

according to the aforementioned authors, by correctly implementing incentives and influences, it is possible

to improve people's life skills, while also helping solve problems in a society.

Nudging can occur even when people still have the freedom to choose. Sunstein and Thaler have given an

example with “unhealthy” food. If fruits are placed before chocolate in a school canteen, fruit consumption

increases, and chocolate consumption decreases. Another example is to require people to use forks instead

of spoons to load high-carb foods onto plates but provide spoons for vegetables. By doing so, placing

5 R. THALER, C. SUNSTEIN, op. cit., 6. 6 W. SAFIRE, On Language, column in the New York Times Magazine, October 8, 2000.



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significant quantities of “unhealthy” foods on a plate is more difficult, whereas loading one’s dish with fresh

vegetables is easier7.

According to Pelle Guldborg Hansen, nudging is defined as a «psychological-based attempt to influence

people’s judgments, choices or behaviours in a predictable way, which is made possible because of cognitive

biases, routines and habits in individual and social decision-making. These limitations can pose barriers for

individuals trying to act rationally in their own self-declared interests. Nudging works by making use of those

biases, routines, and habits as integral parts of such attempts»8.

The idea of nudging has been used as a tool to assist with plans of action and reductions in government

spending that was caused by poor choices. Nudging has been widely used by governments, including the

health care sector, and the incentive to search for cost-effective preventive programmes is critical. For

instance, smokers create high costs for the public sector, which is why, according to Daphne Iglesias,

packaging on cigarettes should alert consumers and reduce their cigarette consumption. As Iglesias has

noted, one of the major problems related to public health and government spending is the diseases caused

by smoking, which can require the use of a high-cost physician in the future. Listing the consequences of

smoking on cigarette packaging could be used as a smoking cessation aid9.

According to Iglesias, the concept of “good and bad” or “what is better and worse” is always linked to an idea

and to the thinking and decisions that lead to both positive and negative ends over the years. As such, she

has explained that improving the application of public policies is useful in public administration spending.

At this point, it is relevant to assess the idea of liberal paternalism, where Thaler and Sunstein10 have

considered that coercion is not attributed to the idea of paternalism and have brought to the fore the concept

of liberal paternalism to be analysed as follows: «What people choose often depends on the starting point,

and hence the starting point cannot be selected by asking what people choose. In these circumstances, the

libertarian paternalist would seek indirect proxies for welfare: methods that test whether one or another

approach is welfare-promoting without relying on unreliable guesswork about that question».

However, nudging does not always happen in an ethically correct way. The problem occurs when users must

deal with health costs while states have removed their responsibility and do not help those who need

assistance. As Deborah Lupton11 has explained, confusion may arise within the limits of care and self-care, as

7 R. THALER, C. SUNSTEIN, op. cit., 2. 8 P.G HANSEN, The Definition of Nudge and Libertarian Paternalism: Does the Hand Fit the Glove?, 2016. 9 D. IGLESIAS, Nudging Privacy: Benefits And Limits Of Persuading Human Behaviour Online. 10 R. THALER, C. SUNSTEIN, op. cit. 11 D. LUPTON, Health Promotion in the digital era: a critical commentary, in Health Promotion International, 30/1, 2014.


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well as with self-initiated health promotions, marketing programs, preventive medicine, health education,

and communication and community development.

Therefore, according to Lupton, the application of nudging should, before being applied, analyse whether in

its result it does not simply shift away the government’s responsibility to the individual citizens.

Another negative aspect attributed to the confusion about the limitations of nudging is whether the practice

is actually a way of manipulating users to make a certain choice since this “push” works with unconscious

factors. In response, Hansen has disagreed that nudging works with users' unconsciousness and has

acknowledged that there is still a great deal of incongruity because there are two factors that influence this

preconception that nudging is implemented via manipulation rather than influencing choice.

The first factor, from Hansen's12 point of view, is that many academics speak directly about the cognitive and

heuristic prejudices that unconsciously influence our behaviours. The second is because some of the most

memorable behavioural perceptions of behavioural economics and cognitive and social psychology occur and

are those that actually surprise - and these perceptions that cause surprise and even fascination are typically

those that somehow influence behaviour in a way labelled as “unconscious”. Hence, due to availability bias,

when one thinks of nudging, the idea of manipulation is strongly associated.

Upon further analysis regarding the idea that nudging is a form of manipulation, Hansen has addressed the

issues of transparent and non-transparent “epistemic impulses”, where according to him, one of the factors

distinguishes the manipulative uses of nudging from others.

In addition, it is also marked as a way of understanding the general idea that Thaler and Sunstein, when

asserting that attempting to influence people's decisions and choices is an objectionable act, is an «invisible,

therefore, difficult to monitor and to control».

Hansen, in discussing transparent nudging, has defined the same as an intervention is provided in such a way

that users can recognise three following intervention steps with their consequent results:

1. The agent, i.e., who is the author of nudging or who is the architect of choice;

2. The ends or objectives are reflected in the real intentions of the intervention and the application of

nudging, and;

3. The means, where transparency is clear and demonstrates how intervention should influence people's

choices and behaviours.

12 P.G. HANSEN, The Definition of Nudge and Libertarian Paternalism: Does the Hand Fit the Glove?, 2016.



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On the other hand, non-transparent nudging is defined as nudging that is worked in a way that does not allow

the identification of the agent, the intentions or the means in which the change of choices and behaviours is

sought.

Therefore, as Hansen has explained, from the moment nudging presents the transparency factors, defined

in who the agent is, what the means and ends of the intervention, the people being the users of nudging are

not being manipulated, but rather dealing with an intervention so that their choices and behaviours are

influenced so that the end result and its consequences are better than before.

Another relevant aspect is that the idea of nudging and the architecture of choice do not only cover simple

decisions and immediate results after the best choice made. Rather, they are part of a whole system, where

both favourable and unfavourable situations are present to encourage certain behaviours to actually change.

Again, Thales and Sunstein have noted that nudging works beyond simple and even irrelevant situations

because as they have explained, no behaviour occurs in a vacuum; nudging and the architecture of choice

surround people all the time, making each one ubiquitous.

Returning to the idea of choice architecture, Mark Schweizer has coupled the following definition with Thaler

and Sunstein’s nudging conceptualisation: «The activity of organizing the context in which a decision is made

is termed “choice architecture”. A nudge is defined as “any aspect of the choice architecture that alters

people’s behaviour in a predictable way without forbidding any options or significantly changing their

economic incentives.” In other words, the choice set remains the same, it is only structured differently».13

Therefore, we realise our environment is not only a background but also one of the determinants of our

choices and behaviours. In this way, we cannot escape nudging, so we must accept choosing and designing

our environment so the influences will be positive and provide a better result for the interests of the users.

It is concluded that nudging is not only the small and discreet interventions that influence people's

behaviours and choices but also that it is all around us, intentionally or not.

13 M. SCHWEIZER, Nudging and the Principle of Proportionality – obliged to Nudge?, in K. MATHIS, A. TOR (eds.), European Perspectives

on Behavioural Law and Economics, Heidelberg, 2016.


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3. Nudging in practice - or how far can health insurances nudge their customers to a healthier lifestyle?

As the previous analysis shows, nudging is cost-effective, does not entail bureaucratic regulations and has

the potential to lead society to “health, wealth, and happiness”14. It is not surprising that governments have

an interest to nudge their citizens towards a certain behaviour, but private companies have also discovered

the concept to redirect the behaviours of their customers15.

A recent example in the Swiss health insurance sector illustrates the debate that is evolving around the

concept of nudging. Journalists have raised concerns regarding fears of paternalism, violations of privacy and

the undermining of the principle of non-discrimination in the basic health insurance sector.

To analyse the case of Helsana and its Helsana+ system, a brief overview of the health sector in Switzerland

is first provided before turning to the facts and the three controversies (privacy, non-discrimination and

paternalism) related to the new app of the health insurance provider Helsana.

3.1. A general introduction to health care in Switzerland

In general, Switzerland has good health outcomes but at a relatively high cost. For instance, it is one of the

top three countries where life expectancy at birth exceeds 80 years16, while it simultaneously has the second

largest health care expenditure among all Organisation for Economic Co-operation and Development

countries, after the United States.17

Like the US, the Netherlands and Germany, Switzerland is one of several Western countries that has a

competitive health insurance market. Health care is thus not paid for via taxes as it is in Italy or Denmark;

instead, there exists a market with different health insurances competing for customers, and the state

typically only sets a framework in which the health insurances compete. Usually the framework includes an

open enrolment period, community-rated premiums, a risk equalisation system and a standardised benefit

package18. In Switzerland, it is mandatory to have a basic health insurance, although citizens can choose

14 R. THALER, C. SUNSTEIN, op. cit., 1. 15 Currently over 150 governments use nudges to attain their policy objectives. C.R. SUNSTEIN, L.A. REISCH, J. RAUBER, Behavioral Insights

All Over the World? Public Attitudes Toward Nudging in a Multi-Country Study, in

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2921217, 2017, 3. More concrete examples are the British Behavioural

Insights Team, which promoted initiatives based on nudging in various areas, such as smoking cessation, energy efficiency, organ

donation, consumer protection and compliance strategies in general. The US behavioural insights team has focussed on strategies in

fuel economy, energy efficiency, environmental protection, healthcare and obesity. On an international level, the OECD has published

recommendations encouraging the use of nudges and the European Union bases its policy initiatives for a better protection of the

environment on behavioural economics. C.R. SUNSTEIN, Nudges.gov: Behaviorally Informed Regulation?, in E. ZAMIR, D. TEICHMAN (eds.),

The Oxford Handbook of Behavioral Economics and the Law, Oxford, 2015, 721. 16 OECD, Health at a Glance, Paris, 2017, 48. 17 OECD, op cit., 29. 18 D.M.I.D. DUIJMELINCK, I. MORICA, W.P.M.M. VAN DE VEN, Switching benefits and costs in competitive health insurance markets: A

conceptual framework and empirical evidence from the Netherlands, in Health Policy, 119, 2015, 664.



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between different providers. The principle of non-discrimination ensures that anyone applying has to be

accepted by any health insurance provider for basic health insurance. The basic health insurance offers the

same benefits; however, prices vary depending on place of residence, sex, age and the annual deductible

sum. On average, an adult pays up to 450 CHF (approximately €375) a month to carry basic insurance.

Different health insurance companies can then offer supplementary insurance at varying prices19.

The goal of a competitive health insurance market is that through the threat of consumers switching to

competitors, insurance companies have a continued incentive to provide high quality at a reasonable price.

A benefit often cited by economists regarding a competitive free market is that it spurs innovation20. One

approach taken by Helsana and other Swiss health insurers such as Sanitas, Swica or CSS has been to offer

apps for customers to download to their mobile devices, which is indicative that the health insurance market

in Switzerland is functioning and the different actors are competing to reduce their costs21. The basic idea of

these apps is to incentivise health insurance customers to adopt healthier lifestyles, leading to healthier

individuals and fewer costs for the insurance company.

3.2 The case of Helsana

The introduction of Helsana’s digital app has not been without widespread criticism. The press has focused

on three main points: first, the problems in terms of privacy that arise with the functioning of the app; second,

whether the company is violating the fundamental principle of non-discrimination in the health insurance

market; and third, whether the app still is merely a nudge or whether it represents financial coercion22. To

better understand why those concerns are being discussed, the following paragraphs provide a brief

overview of the functioning of Helsana’s app.

Helsana introduced a system (Helsana+) where an active lifestyle is rewarded with financial benefits

(premiums) and being physically active and taking preventive health measures lead to lower health insurance

costs. To keep track of those activities, Helsana introduced a digital app where interested participants can

track their physical activity and transform their exercise into points, which can then be turned into cash. To

19 https://www.eda.admin.ch/aboutswitzerland/de/home/wirtschaft/soziale-aspekte/gesundheitssystem.html (last visited

06/05/2018). 20 W.J. BAUMOL, The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism, Princeton, 2002, 55. 21 A. MÖCKLI, Datenschützer warnt for Gesundheits-Apps – Untersuchung gegen Helsana, in Schweiz am Wochenende, 14.10.2017. 22 A. MÖCKLI , op.cit.; S. FAKI, «Kranke und Alte werden diskriminiert», in Blick, 19/03/2018; P. TISCHHAUSER, Helsana-plus-App spioniert

Nutzer aus und ergänzt mit Facebook-Daten, in Blick, 23/03/2018; A. ZUCKER, Krankenkassen sollen uns belohnen, nicht bevormunden,

in Neue Zürcher Zeitung am Sonntag, 24/03/2018; C. ZÜRCHER, 350 Franken sparen mit der ungesunden App, in Tagesanzeiger,

20/03/2018.


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increase user friendliness and to facilitate the collection of points, other health apps can be connected to the

Helsana app, including Apple Health or Google Fit. Apps by other insurers such as Sanitas also collect data

from wearable devices that track heart rates, steps and sleep patterns, all of which are potential indicators

of the physical fitness of a customer23. In the Helsana+ model, users can manually enter proof of nutrition

courses, health check-ups, or membership cards for gyms or different sports clubs in the app to collect

additional points. The maximum cost reduction that can be achieved is 300 CHF (approximately €250) a year

under the supplementary insurance of Helsana, and, as a first in the Swiss health insurance sector, a

maximum of 75 CHF (approximately €63) a year under the basic health insurance24. The initial problems

raised shall now be addressed in the following sections.

3.2.1 Getting money for your bikini body - can you have your cake and eat it too?

In 2011, a paper was published describing a digitized weight-loss program called “Fit4Life”25, in which the

authors explained the different gadgets that would help the app keep track of an individual’s weight loss as

part of the programme. The writers also detailed the image-processing algorithms that estimated calories

consumed by the user, an earpiece that could track jaw movements, an electronic weight scale integrated in

socks or shoes, a heart-rate monitor around the chest and lastly, a metabolic lancet around the user’s toe to

measure blood for metabolic rate. All those gadgets would be connected to the initial app, which in turn was

linked to the user’s social media site to broadcast progress and incentivise weight loss26. At the end of their

demonstration, the authors made clear that the system outlined was intended purely as a thought

experiment to highlight social and ethical issues and to demonstrate how such designs could «spiral out of

control»27.

Today, not many years later, those systems have actually become reality28, while fears regarding the loss of

privacy have equally grown. Recent scandals related to Facebook and Cambridge Analytica Data have only

emphasised the increased awareness being given to privacy protection29. The entering into force of the

General Data Protection Regulation for the European Union has strengthened the trend that regional and

23 A. MÖCKLI, op. cit. 24 https://www.helsana.ch/microsite/plus/#/?lang=en (last visited 06/05/2018). 25 S. PURPURA, V. SCHWANDA, K. WILLIAMS, W. STUBLER, P. SENGERS, Fit4Life: the design of a persuasive technology promoting healthy

behaviour and ideal weight, in Proceedings of the SIGCHI Conference on Human Factors in Computing Systems, 2011. 26 S. PURPURA ET AL., op. cit., 425-426. 27 S. PURPURA ET AL., op. cit., 427. 28 M. NIKLOWITZ, Problemzone Datenschutz, in Schweizer Versicherung, 345.004, 2016, 41. 29 http://www.bbc.com/news/topics/c81zyn0888lt/facebook-cambridge-analytica-data-scandal (last visited 06/05/2018).



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national legislators are working to ensure the effective protection of an individual’s privacy30.

At the same time, younger generations typically have lower privacy expectations than older generations, and

their greater familiarity with new technologies might have supported the spread of those technologies,

including ones similar to “Fit4Life”31. Different studies have shown that digitized health promotion is

accepted as appropriate and is used in corporate and government-sponsored health advancement

programmes32. User acceptance of apps that link personal fitness level to an overarching goal of improving

health is surprisingly high, considering individuals know that their personal GPS coordinates are tracked and

their privacy is compromised33.

Likewise, Helsana’s app and other similar apps have been downloaded and used, and consumers seem to be

less sensitised regarding their personal data than legislators or journalists and scholars appear to think or

wish. However, while consumers might be negligent about their personal data, Helsana is not exonerated

from complying with the relevant data protection laws.

At its own initiative, the Federal Data Protection Commissioner has published an opinion regarding the

compliance of Helsana+ with the Swiss Federal Data Protection Law34. The report notes that Helsana+ does

not comply entirely with the law regulating data protection, which requires a sufficient (Federal) legal basis

allowing for the transmission and treatment of personal data. However, such a legal basis is missing in the

present case, particularly regarding the current transmission of collected data under the basic insurance to

the supplementary insurance. The Commissioner notably makes reference to Swiss Federal Law on Health

Insurance, which does not precisely regulate the allowance of data transmission and treatment of data

collected under the basic insurance35. Consequently, he advises Helsana to stop offering Helsana+ to its

customers who are insured under the basic insurance. At the very least, the Commission emphasises the

importance of the principle of transparency and asks that Helsana allow customers to access their data at all

30 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with

regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data

Protection Regulation), OJ L 119/1, 2016. 31 T. D. BAXTER, Low Expectations: How Changing Expectations of Privacy Can Erode Fourth Amendment Protection and a Proposed

Solution, in Temple Law Review, 84/599, 2012, 622. 32 D. LUPTON, op. cit., 175. 33 M.N.K. BOULOS, S.P. YANG, Exergames for health and fitness: the roles of GPS and geosocial apps, in International Journal of Health

Geographics, 12/18, 2013, 1.

More generally, the acceptance of nudges, notably in industrialised Western democracies, is evaluated to be high. C.R. SUNSTEIN, L. A.

REISCH, J. RAUBER, op. cit., 17. 34 Eidgenössischer Datenschutz- und Öffentlichkeitsbeauftragter EDÖB, Empfehlung des Eidgenössischen Datenschutz-und

Öffentlichkeitsbeauftragten (EDÖB) vom 26. April 2018 gemäss Artikel 29 des Bundesgesetzes vom 19. Juni 1992 über den Datenschutz

(DSG; SR 235.1) betreffend Bonusprogramm Helsana+ der Helsana Zusatzversicherungen AG, A2018.04 13-0001/ 2017-00236. 35 EDÖB, op cit., 3.


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times36.

The Federal Data Protection Commissioner is a non-judicial governmental position, and corporations do not

have to accept his opinions as binding. In the present case, Helsana has decided not to comply with the

rendered opinion. According to Helsana, there exists a sufficient legal basis since each individual has agreed

to participate in the programme. Furthermore, Helsana+ is not subject to the Federal Law on Health

Insurance because the premiums paid to the users do not originate from the basic insurance but from other

incomes (notably profits made through supplementary insurance)37. As a result, the case will be heard before

the Swiss Federal Administrative Court, which will determine the legality of Helsana+.

The Commissioner’s opinion rendered is quite technical and largely focused on the different obligations for

the provider regarding basic insurance and supplementary insurance. Regrettably, the Commissioner has not

addressed to what extent Helsana can use data obtained in the supplementary insurance programme. The

accumulation of data can easily turn into a loss of control over those data, which increases the risk of a

violation of privacy protection38. Diverse health insurance providers have different access to those health

data, and Helsana has asserted that the app does not collect heart rates, sleep patterns or obesity levels. In

contrast, Sanitas has defended the collection and treatment of such data because customers initially consent

to participate in its programme39. Data relevant to personal physical condition allow conclusions regarding

an individual’s health, including on diseases of which he or she might unaware. For instance, would Helsana

be allowed to generate different profiles of their customers and individualise their insurance products

accordingly?40

Such a question touches not only upon interferences with the private sphere but also on the principle of non-

discrimination in the Swiss health insurance sector.

3.2.2 How does one collect steps in a wheelchair?

What has been most highlighted in the opinion of the Federal Data Protection Commissioner and in the

journal articles informing the public over the case was whether Helsana+ complies with the principle of non-

discrimination in the basic health insurance sector. The programme does not pose a problem regarding the

premiums paid under the supplementary insurance scheme since supplementary insurance is voluntary and

36 EDÖB, op cit., 5; and also referring back to chapter 2 regarding the discussion of Hansen concerning non-transparent nudging. 37 A. VALDA, Helsana sieht kein Datenproblem, in Tagesanzeiger, 27/04/2018. 38 Eidgenössischer Datenschutz- und Öffentlichkeitsbeauftragter EDÖB, Erläuterungen zum Einsatz von Fitnesstrackern im

Versicherungsbereich, https://www.edoeb.admin.ch/edoeb/de/home/datenschutz/gesundheit/kranken--und-unfallversicherungen

/erlaeuterungen-zum-einsatz-von-fitnesstrackern-im-versicherungsb.html (last visited 06/05/2018). 39 A. MÖCKLI, op. cit. 40 Following the logic in D. LUPTON, op. cit., 180.



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differs with each provider41. However, regarding basic insurance, the providers have an obligation to accept

everyone and not discriminate between individual customers. It is now hardly imaginable how all customers,

whether young, old, healthy, sick or handicapped, can have the same rights and opportunities to collect

points to get their financial benefits under the basic insurance42.

The legality of premiums rendering basic health insurance less expensive is thus expected to be analysed by

the Swiss Federal Administrative Court.

Returning to the issue of individual profiling established on the basis of data collected in voluntary premium

programmes such as Helsana+, a potential risk for customers of supplementary insurance could be that their

providers would resign the supplementary insurance. Resignation could notably occur if, based on their

profiles, it became clear that customers had illnesses or would otherwise generate increased costs for the

health insurance. Founded on the principle of freedom of contract prevalent in the supplementary insurance

sector, such a scenario would not be unlikely43. At present, insurance companies require health history

questionnaires before accepting new customers for their supplementary insurance44. Nevertheless,

automatic and up-to-date personal profiling would enhance the decision-making power of health insurance

providers. In 2016, Swica refused the intention of using such practices in the future45.

3.2.3 Is paying hard cash still a soft nudge?

Lastly, concerns have been voiced regarding the legitimacy of the concept of nudging itself. Journalists have

described the state as a paternalistic teacher of its citizens, who are in need to be correctly educated. In their

eyes, all campaigns against smoking, sugar- and fat-intensive nutrition and alcohol or for vaccinations and

sports want to reduce risk for citizens and limit the individual fundamental rights to privacy and choice46. In

light of those generic accusations, it is useful to remain objective and be mindful that every functioning

government initially relies on some degree of coercion47, precisely to ensure an ordered society that is based

on civil liberties48. In a democratic society, a state can restrict fundamental rights if those restrictions are

41 EDÖB, op cit., 5. 42 C. ZÜRCHER, op. cit. 43 Article 1, The Code of Obligations of 30 March 1911 (status as of 1 April 2017), SR 220. 44 W. AESCHIMANN, Haben Sie die richtigen Zusatzversicherungen, in Beobachter, 05/03/2018. 45 O. FUETER, Gläserne Versicherte: Für Daten gibt es Rabatt, in Espresso, 02/09/2016. 46 C. ZÜRCHER op cit. 47 C. R. SUNSTEIN, The ethics of incluence: government in the age of behavioural science, Cambridge, 2016, 18. 48 M. R. RUTGERS, The Purpose of the State, in Administrative Theory & Praxis, 30, 2008, 350.


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based on law, are proportionate and are justified in the public interest49. Thus, as long as the goal of ‘healthy’

citizens is democratically legitimised, a state has incentives to use nudges, especially considering the

advantages presented at the beginning of this paper50.

Nevertheless, professors at renowned Swiss universities are highly sceptical towards nudging. In his essay,

Schweizer finds that paternalistic motives tend to only be accepted as legitimate limitations on fundamental

freedoms (e.g. the right to privacy) when the averted harm is significantly severe and irreversible. Examples

include mandatory requirements for wearing a helmet if riding a motorcycle or wearing a seatbelt in cars51.

Schweizer also argues that to justify limitations, those restrictions must be proportionate and necessary; as

such, nudges are prone to prevail over regulatory measures regarding their proportionality. Following

common-sense intuition, non-coercive measures, which simply seek to influence choices, must certainly be

milder measures and thus more proportionate than strict regulatory interventions52. However, nudges, in

order to be effective, need to be supported by «a web of regulation and government marketing»53. As a

result, Schweizer concludes that nudging is as burdensome and no more proportionate than traditional

regulation54.

Other scholars agree on the fact that nudging in the health insurance sector follows a paternalistic top-down

approach55. They go even further in questioning whether lower health insurance premiums, such as those

offered through Helsana+, still qualify as nudging or are instead a measure of financial coercion56.

With these final thoughts, we find ourselves returning to the question of what qualifies as nudging, how

effective it really is and how legitimate it is in a democratic society that upholds individual liberties.

4. Conclusion

In conclusion, this paper sought to provide an overview of the possibilities and limitations of the concept of

nudging but did not want to confine itself solely to a theoretical discussion. While the theories provided an

important basis to understand the functioning of a defined concept rooted in behavioural economics, the

49 For example article 8, ECHR and article 36, Federal Constitution of the Swiss Confederation of 18 April 1999 (status as of 1 January

2018), SR 101 (‘Swiss Federal Constitution’). 50 As example, in the Swiss Federal Constitution there is reference made to public health in article 41, article 68, article 117, article

177a, and article 118 (allowing to take measures to ensure the protection of public health).

The ‘public health challenge’ and the costs associated therewith are explained in M. QUIGLEY, Nudging for Health: on Public Policy

and Designing Choice Architecture, in Medical Law Review, 21, 2013, 594. 51 M. SCHWEIZER, op. cit., 104. 52 M. SCHWEIZER, op. cit., 94. 53 L. E. WILLIS, When nudges fail – slippery defaults, in University of Chicago Law Review, 80, 2013, 1229. 54 M. SCHWEIZER, op. cit., 109. 55 D. LUPTON, op. cit., 179. 56 D. LUPTON, op. cit., 179 and P. OLSON, A. TILLEY, The quantified other: Nest and Fitbit chase a lucrative side business, in Forbes,

05/05/2014.



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different authors discussed have indicated that the concept of nudging is not uncontroversial. It has been

advanced that nudging is merely a nicer way of adopting policies that obscurely manipulate people’s

decisions, and it was explained that any decision is influenced by the choice architecture. Enhancing that

choice architecture to lead to desired results is thus merely a cost-effective and efficient way to remedy

market failures. It was accepted that the concept of nudging rests on a (liberal) paternalistic basis, but at the

same time, it stems from the existence of a state and its social contract that certain areas of societal life need

to be regulated. Thus, as long as the goals and desired achievements are democratically legitimised, nudging

is an appropriate alternative to traditional regulation. Remaining is the problem to what extent private

corporations and especially health insurance companies that fulfil a somewhat public task are legitimised to

nudge their customers.

In the present case, the launch of Helsana+ by the Swiss health insurance Helsana could not have been better

timed. The doctrinal discussion concerning the definition of nudging, including its ethical limits; the

protection of privacy; and the liberty to decide for oneself without interference have proven to not only

interest academics but also the wider public. The launch of Helsana+ has started an engaged public discussion

in the press, on social media and among politicians and has also involved the opinions of different

governmental bodies, while a judgment by the Swiss Federal Administrative Court is expected in the near

future. Although the trade-off between money and increased activity has already been introduced by other

health insurances, Helsana’s choice to activate its programme not only for its supplementary insurance but

also under the mandatory basic health insurance was ground-breaking and has triggered a fundamental

debate about how to organise public health in Switzerland. Certainly, these discussions can only be welcomed

in a democratic society. The discussions ensure that states and private entities (whether paternalistic or not)

have continued feedback and have a chance to improve their policies.

Lastly, for the case at hand, the increased publicity and awareness for Helsana could be positive in that

potential customers might switch providers as these individuals support and welcome a system nudging them

to healthier behaviour. In contrast, protests by civil society or the courts could be quite strong, and Helsana

and potentially other health insurance providers could need to stop their bonus programmes, either entirely

or partially.

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To what extent can health insurance companies nudge their ... · to improve people's life skills, while also helping solve problems in a society. Nudging can occur even when people